BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    THIRD READING


          Bill No:  AB 219
          Author:   Perea (D), et al.
          Amended:  9/4/13 in Senate
          Vote:     21

           
           SENATE HEALTH COMMITTEE  :  7-2, 6/26/13
          AYES:  Hernandez, Beall, De León, DeSaulnier, Monning, Pavley,  
            Wolk
          NOES:  Anderson, Nielsen

           SENATE APPROPRIATIONS COMMITTEE  :  4-2, 8/12/13
          AYES:  De León, Hill, Lara, Steinberg
          NOES:  Walters, Gaines
          NO VOTE RECORDED:  Padilla

           ASSEMBLY FLOOR  :  64-9, 4/22/13 - See last page for vote


           SUBJECT  :    Health care coverage:  cancer treatment

           SOURCE  :     Carries TOUCH, Inc 
                      Susan G. Komen  For the Cure, California Affiliates


           DIGEST  :    This bill requires health care service plan (health  
          plan) contracts and health insurance policies issued on or after  
          January 1, 2015, that cover prescribed, orally administered  
          anti-cancer medications to limit an enrollee or insured's total  
          cost share to no more than $200 per filled prescription, as  
          specified.  Sunsets these provisions on January 1, 2019.

           Senate Floor Amendments  of 9/4/13 delete the current contents of  
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          the bill, and replace with language that is similar.  The  
          amendments increase the limit on a health plan or insurance  
          policy enrollee's total cost share for oral anticancer  
          medications.  

           ANALYSIS  :    Existing federal law establishes the Affordable  
          Care Act (ACA) to make, among other provisions, statutory  
          changes affecting the regulation of, and payment for, certain  
          types of private health insurance and includes coverage for  
          prescription drugs in the categories of 10 essential health  
          benefits (EHBs) that all qualified health plans must cover.

          Existing state law:

          1.Under the Knox-Keene Health Care Service Plan Act of 1975,  
            regulates and licenses health plans and specialized health  
            plans by the Department of Managed Health Care (DMHC),  
            Provides for the regulation of health insurers by the  
            California Department of Insurance (CDI).

          2.Requires health plan contracts and health insurance policies  
            to provide coverage for all generally medically accepted  
            cancer screening tests and requires those plans and policies  
            to also provide coverage for the treatment of breast cancer.

          3.Imposes various requirements on health plan contracts and  
            health insurance policies that cover prescription drug  
            benefits, such as a requirement to cover "off-label" uses, as  
            specified, and the requirement to cover previously prescribed  
            drugs, as specified.

          4.Authorizes DMHC to regulate the provision of medically  
            necessary prescription drug benefits by a health plan to the  
            extent that the plan provides coverage for those benefits.   
            Existing regulation requires health plans providing outpatient  
            prescription drugs to provide all medically necessary  
            prescription drugs, except as specified in that regulation.

          5.Establishes the Kaiser Small Group Health Maintenance  
            Organization plan as California's EHB along with the following  
            10 ACA mandated benefits:

             A.   Ambulatory patient services;
             B.   Emergency services;

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             C.   Hospitalization;
             D.   Maternity and newborn care;
             E.   Mental health and substance use disorder services,  
               including behavioral health treatment;
             F.   Prescription drugs;
             G.   Rehabilitative and habilitative services and devices;
             H.   Laboratory services;
             I.   Preventive and wellness services and chronic disease  
               management; and
             J.   Pediatric services, including oral and vision care.

          This bill:

          1.Makes several Legislative findings and declarations related to  
            cancer patients and oral medication, including intent of the  
            Legislature to set a maximum total copayment and coinsurance  
            amount that health care service plans and health insurers can  
            require patients to pay for a 30-day supply of oral anticancer  
            medication.  Clarifies that the Legislature does not intend  
            health care service plans or health insurers to interpret that  
            maximum to be a target or desirable patient cost.

          2.Requires, notwithstanding any other law, an individual or  
            group health plan contract or health insurance policy issued,  
            amended, or renewed on or after January 1, 2015, that provides  
            coverage for prescribed, orally administered anticancer  
            medications used to kill or slow the growth of cancerous cells  
            to comply with all of the following:

             A.   Prohibits, notwithstanding any deductible, the total  
               amount of copayments and coinsurance an enrollee is  
               required to pay from exceeding $200 for an individual  
               prescription of up to a 30-day supply of a prescribed  
               orally administered anticancer medication covered by the  
               contract or policy; 

             B.   Requires, for a health plan contract or health insurance  
               policy that meets the definition of a "high deductible  
               health plan," as specified, to only apply once an  
               enrollee's deductible has been satisfied for the year.

             C.   Clarifies these provisions do not apply to any coverage  
               under a health plan contract or health insurance policy for  
               the Medicare Program, as specified. 

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             D.   Authorizes, on January 1, 2016, and on January 1 of each  
               year thereafter, health plans and insurers to adjust the  
               $200 limit. Prohibits the adjustment from exceeding the  
               percentage increase in the Consumer Price Index for that  
               year.

             E.   Requires a prescription for an orally administered  
               anticancer medication to be provided consistent with the  
               appropriate standard of care for that medication.

          1.Establishes a January 1, 2019, sunset date. 

           Background
           
           Oral anti-cancer medications  .  According to the California  
          Health Benefits Review Program (CHBRP), anti-cancer medications  
          may be administered through an IV, by injection, or orally.   
          Although oral anti-cancer medications have been available for  
          many years, the number of oral anti-cancer medications approved  
          by the federal Food and Drug Administration (FDA) has grown by  
          108% over the past decade.  The FDA approved 28 new oral  
          anti-cancer medications between 2003 and early 2013, which  
          increased the total number of oral anti-cancer medications on  
          the market from 26 to 54 medications.  According to CHBRP, this  
          trend is likely to continue.  The National Comprehensive Cancer  
          Network estimates that 400 anti-cancer medications are currently  
          under development, and approximately 25% of them are planned to  
          be administered orally.

           Medical and pharmacy benefit coverage  .  According to CHBRP,  
          coverage for anti-cancer medications can differ in a number of  
          ways, depending on provisions of a person's health plan contract  
          or health insurance policy.  Anti-cancer medications may be  
          covered as pharmacy plan benefits or as medical plan benefits,  
          and most plans and insurers depend on the dispensing site to  
          determine which will be the form of coverage.  For example, IV  
          anti-cancer medication, which is usually provided in a hospital  
          or a physician's office, is generally covered as a medical  
          benefit, while oral anti-cancer pills dispensed by a pharmacy  
          are usually covered as a pharmacy benefit. 

           CHBRP Report  .  CHBRP was created in response to AB 1996  
          (Thomson, Chapter 795, Statutes of 2002) which requests the  

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          University of California to assess legislation proposing a  
          mandated benefit or service, and prepare a written analysis with  
          relevant data on the public health, medical, and economic impact  
          of proposed health plan and health insurance benefit mandate  
          legislation.  CHBRP's analysis of this bill assumes that because  
          this bill specifies prescribed, orally administered anti-cancer  
          medications, it would only affect drugs specific to the  
          treatment of cancer and not affect other medications, such as  
          anti-pain or anti-nausea medications, that a cancer patient  
          might use during the course of chemotherapy.  Among CHBRP's  
          findings are the following:  
          
           Medical Effectiveness - CHBRP finds that the preponderance of  
            evidence from studies of the effect of cost sharing on the use  
            of anti-cancer medications suggest that cost sharing has a  
            small effect on the use of oral anti-cancer medications .   
            Studies found that cost sharing has a larger effect on  
            abandonment of and adherence to oral anti-cancer  
            prescriptions.  Abandonment occurs when a patient submits a  
            prescription to a pharmacy but later reverses the claim.  In  
            one study reviewed, the authors compared persons with seven  
            levels of cost sharing and found that persons who had cost  
            sharing greater than $250 per prescription were more likely to  
            abandon their prescriptions than persons who had cost sharing  
            of $100 or less.  Studies that examined the impact of cost  
            sharing on adherence concluded that patients who had higher  
            cost sharing were less likely to be adherent to the oral  
            anti-cancer medication prescription.
          
           Benefit Coverage, Utilization, and Cost Impacts - CHBRP  
            estimates that almost all enrollees with health insurance  
            subject to this bill have at least some coverage for  
            anti-cancer medications.  This bill would affect the health  
            insurance of about 26 million enrollees whose insurance  
            provides an outpatient prescription drug benefit.  CHBRP notes  
            that outpatient prescription drug benefits cover oral  
            anti-cancer medications, though coverage of specific  
            anti-cancer medications may vary by health plan or insurer.   
            CHBRP estimates that 0.54% of enrollees with privately  
            purchased health insurance subject to this bill would use oral  
            anti-cancer medications during the year following  
            implementation.  

           Increases in insurance premiums as a result of this bill vary  

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            by privately purchased market segment, ranging from  
            approximately 0.0025% (DMHC-regulated large-group plans) to  
            0.0047% (CDI regulated individual policies).  Increases as  
            measured by per-member, per-month payments are estimated to be  
            approximately $0.01 for both DMHC-regulated large-group plans  
            and CDI-regulated small-group policies.  This bill would also  
            apply to Medi-Cal Managed Care.  However, the Department of  
            Health Care Services, which administers Medi-Cal, would not be  
            expected to face measurable expenditure or premium increases,  
            as these plans currently cover oral anti-cancer medication  
            benefits with minimal or no cost-sharing requirements.  CHBRP  
            states that the estimated premium increases would not have a  
            measurable impact on the number of persons who are uninsured.

           Prior Legislation
           
          AB 1000 (Perea, 2011) would have required a health plan contract  
          or health insurance policy that provides coverage for  
          prescription drugs and cancer chemotherapy treatment to limit  
          enrollee out-of-pocket costs for prescribed, orally administered  
          anti-cancer medications.  AB 1000 was vetoed by Governor Brown,  
          stating that the bill doesn't distinguish between health plans  
          and insurers who make these drugs available at a reasonable cost  
          and those who do not.  

          SB 961 (Wright, 2010) which was virtually identical to AB 1000,  
          was vetoed by Governor Schwarzenegger, who stated in his veto  
          message that the bill would have added costs to increasingly  
          expensive health insurance premiums and it was unnecessary in  
          light of federal health reform.

          SB 161 (Wright, 2009) would have required a carrier contract or  
          policy that covers anti-cancer treatment to provide coverage for  
          a prescribed, orally administered anti-cancer medication on a  
          basis "no less favorable" than intravenous or injected  
          anti-cancer medications.  SB 161 was vetoed by Governor  
          Schwarzenegger, citing his concerns that the bill limited a  
          carrier's ability to control both the appropriateness and cost  
          of the care by requiring immediate coverage of every medication  
          upon receipt of federal approval, regardless of the provisions  
          of the carrier's formulary, and placed carriers at a severe  
          disadvantage when negotiating prices with drug manufacturers.  

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    

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          Local:  Yes

          According to the Senate Appropriations Committee:

           One-time costs of $70,000 in 2013-14 and $90,000 in 2014-15  
            for review of health plan filings by DMHC. Ongoing enforcement  
            costs are expected to be minor (Managed Care Fund).

           Minor ongoing enforcement cost by the CDI (Insurance Fund).

           No costs to state-run health care programs.  The Medi-Cal,  
            Healthy Families, and Access for Infants and Mothers programs  
            have limited or no cost sharing. CalPERS health plans all have  
            enrollee copayment amounts for prescription drugs that are  
            less than $100 per prescription.

           No costs to provide subsidies for mandated benefits in the  
            California Health Benefit Exchange (General Fund). See below.

           SUPPORT  :   (Verified  9/5/13)

          Carrie's TOUCH, Inc. (co-source) 
          Susan G. Komen - For the Cure, California Affiliates (co-source)  

          AiM at Melanoma
          Albie Aware Inc.
          American Cancer Society Cancer Action Network
          Association of Northern California Oncologists
          BAYBIO
          BIOCOM
          Breast Cancer Solutions
          California Children's Hospital Association
          California Communities United Institute
          California Healthcare Institute
          California Professional Firefighters
          Cancer Legal Resource Center
          Disability Rights Legal Center
          Hurtt Family Health Clinic
          Lung Cancer Alliance
          Medical Oncology Association of Southern California
          National Brain Tumor Society
          Ovarian Cancer Alliance
          Pacific Islander Health Partnership
          PADRES Contra El Cancer

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          Parker & Friends
          Serve the People Community Health Center
          TechNet

           OPPOSITION  :    (Verified  9/5/13)

          America's Health Insurance Plans
          Association of California Life and Health Insurance Companies
          Blue Shield of California
          California Association of Health Plans
          California Chamber of Commerce
          International Myeloma Foundation
          National Patient Advocate Foundation

           ARGUMENTS IN SUPPORT  :    The sponsors of this bill, Susan B.  
          Komen for the Cure California Affiliates and Carrie's TOUCH,  
          Inc., state that this bill will make oral cancer chemotherapy  
          treatments more affordable and therefore more accessible to  
          cancer patients in California.  Supporters, representing patient  
          advocacy groups, providers, and biomedical research companies,  
          among others, point to research showing that a cap on  
          cost-sharing requirements for orally administered anti-cancer  
          medications per filled prescription increases patient compliance  
          with their doctor prescribed therapy and reduces the likelihood  
          of treatment abandonment that is associated with higher  
          cost-sharing amounts.  The American Cancer Society Cancer Action  
          Network notes in support that, typically, orally administered  
          chemotherapy is covered under a health plan's pharmacy benefit  
          and oral chemotherapy medications are often classified in the  
          highest tier of a plan's cost-sharing system.  The Association  
          of Northern California Oncologists writes in support that the  
          emergence of safe, effective, orally administered anti-cancer  
          medications has dramatically improved the quality of life for  
          cancer patients and this bill will make these medicines, which  
          are often more advanced therapies with fewer side effects than  
          traditional chemotherapy, more affordable and accessible.   
          Lastly, biomedical research companies, such as the California  
          Healthcare Institute and BIOCOM, add that remarkable  
          breakthroughs in orally administered cancer treatments are only  
          effective when patients have access to them.

           ARGUMENTS IN OPPOSITION  :    The California Chamber of Commerce,  
          health plans, and health insurers object to this bill because  
          they argue that it threatens the efforts of all health care  

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          stakeholders to provide consumers with meaningful health care  
          choices and affordable coverage options.  America's Health  
          Insurance Plans notes in opposition that cost-sharing is a  
          crucial part of controlling health care costs and setting an  
          arbitrary cost-sharing limit for those who are using oral  
          chemotherapy medication means more of the cost of these  
          expensive medications will need to be borne by other enrollees  
          and the insured in the form of higher premiums.  The California  
          Association of Health Plans (CAHP) contends that this bill does  
          nothing to control the high underlying cost of pharmaceuticals,  
          nor does it do anything to encourage drug makers to be more  
          efficient and lower costs.  CAHP further believes that the ACA  
          provides a more comprehensive solution to lowering consumer  
          costs without favoring one drug class over another and still  
          allows for appropriate utilization and benefit management by  
          health plans.  Blue Shield of California adds in opposition that  
          this bill attempts to carve out special cost sharing rules for a  
          particular line of pharmaceutical company drugs and will only  
          exacerbate the affordability crisis by giving special treatment  
          to certain drug company products.  
           

           ASSEMBLY FLOOR  :  64-9, 4/22/13
          AYES:  Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,  
            Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown,  
            Buchanan, Ian Calderon, Campos, Chau, Chesbro, Cooley, Daly,  
            Dickinson, Eggman, Fong, Fox, Frazier, Garcia, Gatto, Gomez,  
            Gordon, Gorell, Gray, Hall, Harkey, Roger Hernández, Holden,  
            Jones-Sawyer, Levine, Linder, Maienschein, Medina, Mitchell,  
            Morrell, Mullin, Muratsuchi, Nazarian, Nestande, Olsen, Pan,  
            Patterson, Perea, V. Manuel Pérez, Quirk, Quirk-Silva, Rendon,  
            Salas, Skinner, Stone, Ting, Torres, Waldron, Weber,  
            Wieckowski, Williams, Yamada, John A. Pérez
          NOES:  Conway, Dahle, Donnelly, Beth Gaines, Hagman, Jones,  
            Melendez, Wagner, Wilk
          NO VOTE RECORDED:  Achadjian, Chávez, Grove, Logue, Lowenthal,  
            Mansoor, Vacancy


          JL:nl  9/5/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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